Merchant ammonia prices
firmed both East and West of Suez, with forward sales
into January setting new highs. New spot business was
confirmed at $315-320 pt fob Yuzhny, with the forward
market into 2H January said traded even at $350 pt fob.
Middle East spot ammonia, meantime, has been done at
$335 pt fob Qatar, auguring further increases into India
for the remaining formula applications still pending this
month.
Key fundamental news emerged this week in the form of
the Gazprom Management Committee and Ukraine‟s
Fuel and Energy Ministry deal on natural gas tariffs for
2008 at $179.50/‟000 cu m delivered at frontier. The
conclusion most see in this is a competitive Western
European N production industry (with fresh gas cutting
spot prices to EU importers) and a growing likelihood of
Ukrainian swing ammonia production – depending of
course - on downstream nitrogen product pricing.
US replacement ammonia demand is firm, with
competitive bids heard in the US Gulf market at up to
$410-415 pt cfr. January Tampa contract talks are
expected to be tackled next week. It remains to be seen
if the market is to expect another year of monthly (or
fortnightly) pricing.
Asian contract conclusions are still pending in South
Korea and EC India.
Ukraine-origin ammonia for traded in a
narrow range at $315-320 pt fob Yuzhny for December
loading, with a solitary 2H Jan load heard settled at
$350 pt fob. There were also reports of some small
volume business at $305 pt fob probably done at the
very end of the last business week. Both levels have
been left outside our regular date range. The low-end
number ($305 pt fob OPZ to Trammo) is deemed to be
old business while the top-end (Gorlovka to Keytrade) is
outside the prompt spot market, estimated for 20,000t to
load on 15-20 January on the Herakles. Anticipating the
next round of business, there is a wide spread in
remaining Jan spot price ambitions, between $345 and
$400 pt fob.
Sellers appear more confortable quoting into next year
now that a final settlement has emerged on the price of
Russian gas to Ukrainian industrial customers for 2008.
The Ukraine KIP (purely academic at $250 pt fob) will
probably be revised upwards for 2H December. Such a
low price for early December would indicate a very
different outlook among local factories going into
December. The recommendations behind the $250 pt
fob level were clearly substantially more pessimistic than
todays‟ reality.